Foreclosure Laws

[ITGeek]

Hello,

I'm not familiar with Filipino Law in regards to foreclosure on a delinquent mortgage accounts.  First, I need to mention that I'm current on my mortgage payments.  I have a couple of legal issues back in the US, which I'll explain later.

I've requested a "Forbearance Allowance" or "Loan Modification" with RCBC bank, asking them for a 3 month waiver on mortgage payments.  Either of these methods would move the missed 3 months mortgage payments to the end of the loan (with accrued interest).  My written request was forwarded to their collections department, who rejected my proposal.  Their reply follows:

Quote

We apologize but we can't process your request to hold 3 months due.  Be guided that account will still undergo its normal collections process. Once account became 3 months past due, it will automatically endorsed to our Remedial Department.

Can anyone explain what to expect if I'm unable to make 3 months of mortgage payments?
 

Quote

Some background on to my situation, which is a bit complicated.  In August 2016, my former employers Long Term Disability (LTD) insurance stopped my benefits.  Health insurance companies essentially get to write their own rules and decide what is accepted as "objective medical findings".  I had since hired an attorney to represent me on this matter.  Unfortunately, the legal process takes time and the burden is on me and must prove to a Federal ERISA court hearing that the insurance claims reviewer acted arbitrarily or capriciously during the denial process.  Of course this process takes years before a court hearing.  Since August 2016, my family has been living on my savings and retirement account.   Unfortunately, these have now run out in the next 30 days (May 15th).

Finally, I just recently learned that I have "early onset dementia" from one of the countries highest qualified Neurologist (specializes in dementia) at St. Lukes hospital in QC.  As a result, I learned this qualifies me for a SSDI "Compassionate Allowance" claim.  My attorney submitted my SSDI claim "Compassionate Allowance" and also requested processing be expedited under "Dire Needs" as well.  It's been 5 weeks and still no determination.   In addition, there is a 5 month waiting period before benefits are paid.

 

[RBM]

In regards to your mortgage payments I would personally advise follow up in person with the highest ranking bank personal your able to see. At times perhaps it will be necessary to push through the front desk staff. If questions not answered try seek out a recommended attorney in your area.

Sorry not able help in your second part how ever for sure advice will be forthcoming.

[jrlee183]

1 hour ago, ITGeek said:

Can anyone explain what to expect if I'm unable to make 3 months of mortgage payments?

Firstly, im so sorry to hear of your health problems .... the last thing you need is a financial issue such as this to add to your burden.

Foreclosure is used as a last resort in the event of default and in most countries banks would do their best to negotiate a repayment plan before repossessing your property.  That said, this is the Philippines and it could be different.  I guess it would really depend on what it states in your loan agreement.   There is alot of case law with regards to foreclosures, but it would seem to indicate 3 months of missed payments is the general rule of thumb.

If I were you I would go to the bank in person (the actual branch linked to the loan account) and speak to the manager.  take of all of your supporting documents (including your health certifications) with a copy to give to the manager.   Ask him to escalate this to the manager of the collections department.  If he cant do that then ask him to ask his area manager to do it on his behalf.  Writing to collections wont help as you will just get a standard copy and paste response.

Something else to take into consideration is this; did the bank insist on you taking out some kind of insurance together with the loan?  Sometimes these policies can pay out in the event of serious illness which may well help your situation.

[Dave Hounddriver]

3 hours ago, ITGeek said:

Can anyone explain what to expect if I'm unable to make 3 months of mortgage payments?

I know that depends on where you financed it and what percentage is owing.

The Pag-IBIG, low income, starter home mortgage company is quite lenient.  There are places in my subdivision where people did not pay for 3 years before they finally got foreclosed on AND it gets more difficult if its an owner occupied house.  That particular company is trying to help filipinos afford houses and since its low down payment they don't really want the house back.

On the other side of the coin are the equity lenders.  They loan on property when there is high equity and they are more interested in getting your property than your payments.  These are generally private lenders but may include some small banks and credit unions. After 3 months they will aggressively pursue foreclosure.

I would consider most banks to be somewhere in the middle.  Very few banks, (actually I do not know any), will allow a "Loan Modification" but most want the cash rather than the house so they will go through the motions of foreclosure but at any time you are able to bring it fully up to day then they will be happy to stop the foreclosure.  (Note that they may not be able to accept part payment if they have started foreclosure as it may mean they have to restart the foreclosure process.  That means you may have to pay all the back payments due plus costs to bring the mortgage current if you want to stop a foreclosure after they file for it.)

If you have a lot of equity in your house and a good bank manager, I'd suggest talking to him about "rewriting" the mortgage to give you a fresh start and possibly lower payments.  It will depend a great deal on having a good rapport with your bank manager and him having a good relationship with his boss (to convince the boss that this is in the best interests of the bank.)  You may also consider going to an equity lender if you have a lot of equity.  It will cost you a lot but better than foreclosure if you have a lot of equity in your home.

As a last resort, sell the place before they start foreclosure.  For some strange reason the Philippines does not seem to allow a person to "sell their way out" of a foreclosure.  I do not understand that but I know it happens.  It means you need to find a cash buyer and fast.  3 months will go by quickly.

It is wise to talk to the bank manager before you get behind, if at all possible. 

And that is what I have seen happen in Philippines.  Hope some of that helps you. 

Edited April 15, 2018 by Dave Hounddriver

[ITGeek]

Thanks for the advice.  I've worked before with mortgage companies in the US, but the PI's are uncharted waters for me.  I once had a situation after buying a house in 2011 and the interest rate raised my mortgage payments by $500.  During that time, there were many foreclosures on market and owed more than property value.  So the government had programs available to help those in such a situation.  It's funny, I was current on my mortgage payments and was told I didn't qualify for any of the government programs.  So I had to intentionally miss a couple of payments to qualify.  It worked out in restoring my original mortgage rate and payment.  A couple years later, I was able to sell my property at $40k profit.

Jrlee183, I know we had to take out life insurance policies for mortgage loan qualification.  We pay premiums (about $900 USD) on an annual basis at end of calendar year.  I've always had better success speaking with someone face to face in negotiating.  My email correspondence has just someone been with people at their corporate office.  I'll review the life insurance policy to see if there is permanent disability coverage and take all other documentation to our local branch.  I think I'll have better success using your advice than someone inside their corporate office.

Edited April 15, 2018 by ITGeek
Updated reply

[Jollygoodfellow]

 

44 minutes ago, Dave Hounddriver said:

I know that depends on where you financed it and what percentage is owing.

Answer to half your question below. 

4 hours ago, ITGeek said:

Loan Modification" with RCBC bank, asking them for a 3 month waiver on mortgage payments.